Interview With Newt Gingrich; President Obama to Deliver State of the Union Address; Interview With House Minority Leader Nancy Pelosi

Aired January 24, 2012 - 18:00 ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

JOHN KING, CNN ANCHOR: Good evening. I'm John King reporting live from Capitol Hill.

Tonight: an election year State of the Union address from President Obama in a House chamber whose Republican speaker says the commander in chief is campaigning in a way that is, his words now, almost un-American.

Two former House speakers help us frame tonight's stakes -- an exclusive conversation with Nancy Pelosi. And I will go one-on-one with her longtime nemesis, former Speaker, now presidential candidate Newt Gingrich.

Plus, a snowmobiler's helmet cam captures the moment one of his buddies buried alive by an avalanche and then their frantic race to pull him out.

We begin tonight here on Capitol Hill, the stage tonight for the president's annual State of the Union address. Theater, yes, but important theater. President Obama's election-year message will be heavily focused on the struggling economy. And, yes, we are told tonight there will be some sharp partisan dividing lines over taxes, spending, energy policy and who is to blame for Washington's political dysfunction.

On the Republican campaign trail today, the leading contenders urged voters not to forget the last three years as the president tries to frame the year ahead.

(BEGIN VIDEO CLIP)

MITT ROMNEY (R), PRESIDENTIAL CANDIDATE: Did he fix the economy? No. Did he tackle the housing crisis? No. Did he get Americans back to work? No.

(END VIDEO CLIP)

KING: Our chief White House correspondent, Jessica Yellin, is live with her latest reporting on what we will hear from the president tonight.

Jess, let's start with policy proposals. Anything new?

JESSICA YELLIN, CNN CHIEF WHITE HOUSE CORRESPONDENT: You will hear a number of new proposals from the president as he tries to define the terms of debate for the upcoming election year.

Among some of the proposals, broadly speaking, he will lay out new tax incentives for companies that -- quote -- "in-source jobs." That's a term you have heard from him in the past. He's going to renew his call for the Buffett rule. Remember that is where millionaires should be paying a higher tax rate than those who make less.

He will propose more refinancing for homeowners in trouble. But I also want to get to this, John. The White House has just released some excerpts from the State of the Union speech. I want to share some of them with you. This should sound familiar from that speech he gave in Osawatomie, Kansas, earlier in December.

He says -- quote -- "We can either settle for a country where a shrinking number of people do really well while a growing number of Americans barely get by, or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules. What's at stake are not Democratic values or Republican values, but American values."

Clearly there, John, he's trying to set up a strong contrast with his Republican opponents, going in -- both in Congress and essentially on the campaign trail going into this election, John.

KING: And so, Jess, that's essentially the big nut of the president's speech tonight. He will talk fairness, and in talking fairness and policy he is trying to frame the next eight months of the election campaign, right?

YELLIN: Yes, because for the president's campaign they don't want this a referendum on the economy as it is today, but they want to get voters to think about what the middle class' fate will be in an economy of the future under President Obama vs. under a Republican nominee who they would like to associate with Wall Street, with the gambling that took place that got us to the 2008 bubble that led to the recession.

And they want to say that the president stands for opportunity and for a fair shake. I will read you another excerpt from this State of the Union. He will say -- quote -- "Tonight I want to speak about how we move forward and lay out a blueprint for an economy that's built to last, an economy built on American manufacturing, American energy, skills for American workers, and a renewal of American values."

Those are the major themes of this speech you're going to hear, John.

KING: Jessica Yellin, the president is putting his finishing touches at the White House. Jessica Yellin is there. Jess, thank you.

The president's biggest audience is of course the American people. But when he speaks in the House chamber tonight, lawmakers in both parties will be listening closely knowing his agenda and the tone of the presidential race will go a long way in shaping their own campaigns this year.

Senior congressional correspondent Dana Bash has more on the reception awaiting the president.

Let's start with some very tough words this morning from the Republican speaker, John Boehner.

DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: That's right. It was specifically about what Jess was just reporting about the campaign themes we have already heard from President Obama that we will hear tonight, the idea that he is going to insinuate that Republicans are for the wealthy and Democrats are for the people, the middle-class people in this country.

What John Boehner said is that those are the politics of -- they're almost un-American. He said the president is running on this, that Democrats have run on for the past 80 years. He said it's just not right for a guy who promised to be a uniter, not a divider.

Very, very tough on the idea the president is already fully in campaign mode and said that he has been AWOL since Labor Day when it comes to really working with Congress on getting things done.

KING: Sounds like the speaker then is fully in campaign mode as well. He is trying to protect his majority. He wants to keep that gavel. So what does that say?

The president is coming up here, yes, for some policy. Mostly, it's just though to frame the choices for the year ahead. The speaker's in campaign mode. What does it say about the possibility of the president wants his jobs bill done? The Republicans have some jobs proposals? What about the prospects of getting anything done between now and November?

BASH: You will hear the president say he wants to work with Republicans. I heard and other reporters heard John Boehner, the House speaker, saying that he has told his House rank and file he wants to get things done and find common ground with the president.

But when you get to specifics, John, and ask where are you going to find that common ground, it's really hard to see. For people who are looking at this Congress, looking at Washington and its approval rating is at an all-time low, it's not what they want to hear. But the bottom line is the most we could get in terms of something they think they can get out of the House is an FAA reauthorization.

Now, not that that's important, but that's not going to put people back to work. The one thing that they have to do is work on extending the payroll tax for the next year. That's going to be the next fight.

KING: That might be about the only big thing they get done.

Senior congressional correspondent Dana Bash, interesting night on Capitol Hill. You will be in the chamber for the speech. Interesting theater tonight. Thank you, Dana. The Republicans who hope to take President Obama's place next year spent the day down in Florida telling Republican voters and anyone else listening don't believe much of what you will hear tonight.

(BEGIN VIDEO CLIP)

RICK SANTORUM (R), PRESIDENTIAL CANDIDATE: You're going to hear a bunch of flowery rhetoric and all this stuff about all the things he's done. But what he's done is he's grown the tax burden on the American public through Obamacare and through Dodd-Frank and through other bills.

(END VIDEO CLIP)

KING: Also in Florida, a man who sat just behind the president in the speaker's chair during several State of the Union speeches back in the 1990s.

I spoke to the former Speaker Newt Gingrich, now a Republican presidential candidate, before a big event he held today in Sarasota.

(BEGIN VIDEOTAPE)

KING: Mr. Speaker, thank you for your time today.

Let's start with tonight. The president will give his State of the Union address. You have been there before. It's an election-year State of the Union address. And he will say tonight that, to be fair to the middle class, Washington needs to make the rich pay more in taxes. He will have Warren Buffett's secretary there as one of his guests to make the point.

Is he right?

NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: Well, to be fair to the middle class, I think everybody should pay less in taxes, have a smaller government.

We have a proposal for a 15 percent flat tax as an option based on the Hong Kong model, which we have labeled the Mitt Romney flat tax because it will be about the same percentage as Mitt paid.

I think the fact is, Americans are overtaxed. This administration is making it worse. And this administration's killing jobs.

KING: Let's go back to last night's debate and a few things you said last night that are drawing some scrutiny this morning.

Here's one you were talking about. You just mentioned this, your time as speaker and the balanced budgets of the late 1990s. Let's listen.

(BEGIN VIDEO CLIP) GINGRICH: When I was speaker, we had four consecutive balanced budgets, the only time in your lifetime, Brian, that we've had four consecutive balanced budgets.

(END VIDEO CLIP)

KING: Now, some of the fact-checkers have jumped on this, Mr. Speaker. There were two balanced budgets while you were still speaker. The other two happened after you left office. Just a slip of the tongue there? Hyperbole?

GINGRICH: Well, I just said to you a minute ago, taking cognizance of the fact-checkers, that the Balanced Budget Act of 1997, which was negotiated and signed while I was speaker, led to four consecutive balanced budgets.

There was no major policy change in that period. And I think people will go back and look and say, yes, it's fair for Newt to say that the bill that he offered and that was passed and that he negotiated did lead to four consecutive budgets. Two came after I left, but they were within the momentum of the bill we signed in '97.

KING: As you know, you and Governor Romney got into it a bit last night. He accused you of influence-peddling after you left office.

And just before the debate, you released one year of your contract with Freddie Mac, a consulting contract that, again, as you well know, has become a source of tension and friction in the campaign.

Something you said in describing that tenure and in rebutting Governor Romney is also getting attention this morning. Let's listen.

(BEGIN VIDEO CLIP)

GINGRICH: I have never, ever gone and done any lobbying.

In fact, we brought in an expert on lobbying law and trained all of our staff.

(END VIDEO CLIP)

KING: There are some people in Washington who say, aha, brought in an expert to train our staff. Why? Were they going to dance up to the line? Were they going to operate in the gray area? Explain specifically why you did that, sir.

GINGRICH: You know, now, this is the kind of cynicism that leaves you in despair.

OK, we want to make sure we're never lobbying, so we bring in somebody who's an expert to say, this is what lobbying is. This is what you can do as a citizen. Now, I would have thought that was a sign of being careful, it was a sign of working, looking ahead, it was a sign of trying to do the right thing. I have been an active public citizen since I first ran for Congress in 1974. I have written books, I have given speeches, I have been on television.

Take the example of Medicare Part B which Romney brought up. I have been openly in favor of senior citizens getting medication for most of my career. I wrote an entire book, "Saving Lives and Saving Money," in 2002. Everybody who knew what I was doing and looked at the Center for Health Transformation's Web site knew that I believed it was a stupid policy to say that Medicare won't pay for insulin, but it will pay for kidney dialysis if you have complications from diabetes.

It won't pay for Lipitor, but it will pay for open-heart surgery. It's bad medicine. It's inhumane and it's expensive. That was my public policy.

Now, as a senior member of the Republican Party, calling somebody to say, "As you know, I favor this" is not lobbying. It is an expression of my citizenship. And I think Governor Romney just doesn't get it. I also think he frankly doesn't care about the facts. And I think he was throwing words around that his consultants said sounded good in focus groups, with no regard for whether or not they were true.

KING: Well, let's talk about some of the words you speak, because I think part of this Freddie Mac controversy is that you have been imprecise, or, sir, if not imprecise, wrong on some occasions.

You told Laura Ingraham this morning your contract was with the head of government relations, not the head of lobbying.

I have reviewed that contract. It was with a man named Craig Thomas, whose title was vice president of public policy. And according to both Republicans and Democrats who worked there at the time, he was the head of the lobbying shop. That's not saying you were lobbying, sir, but your contract was with the head of the lobbying shop. That's a fair statement, isn't it?

GINGRICH: Well, it's a fair statement. He's also the head of public policy. And they were asking my advice on public policy.

Now, again, I didn't actually care who signed the contract. I cared what I did. And what I did was offer strategic advice, bringing to bear both my knowledge as a historian and my knowledge as a former speaker of the House and somebody who had worked with Habitat for Humanity trying to make sure that there were practical, conservative ways of helping poor people learn how to build and how to buy a house.

So it goes back to, the contract says I'm a consultant. It doesn't say lobbying anywhere. And so you end up with Mitt Romney, who now has a contract and doesn't want to believe it. Well, I can't make him believe things. He's allowed to run around and say what he wants to. It just happens to be untrue.

(END VIDEOTAPE) KING: Much more of that conversation with Speaker Gingrich to come, including, yes, a revisiting of our debate encounter last week in South Carolina.

(BEGIN VIDEO CLIP)

GINGRICH: You didn't have to take the bait. You didn't have to pick it up. You could have ignored ABC. We could have gone straight to energy policy, the economy, balancing the budget. There are lots of big questions we could have talked about.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

KING: As you can see, we're live on Capitol Hill tonight, a beautiful night in Washington, D.C., unseasonably warm, about two-and- a-half-hours until the president makes his way right there into the Capitol Building to deliver his election-year State of the Union address to the American people.

He delivers it, of course, as the Republican campaign for president enters full-steam, the Florida primary up just next week.

As we await the president tonight, I spoke earlier today with one of the Republicans who hopes to replace him to deliver the big speech here early next year, the former House Speaker Newt Gingrich. He was in Florida.

Among our subjects, I asked him about some of his comments in last night's Republican debate that have the fact-checkers pretty busy today.

(BEGIN VIDEOTAPE)

KING: You also talked about when you left office. And Governor Romney was saying you left in disgrace.

And, sir, you said this.

(BEGIN VIDEO CLIP)

GINGRICH: I left the speakership after the 1998 election because I took responsibility for the fact that our results weren't as good as they should be. I think that's what a leader should do. I took responsibility, and I didn't want to stay around, as Nancy Pelosi has.

(END VIDEO CLIP)

KING: Some of your friends, Mr. Speaker, say that's a bit of revisionist history. They say you were campaigning for reelection. You realized you didn't have the votes among the Republicans in your caucus. And then you decided, when you didn't have the votes, to say goodbye.

GINGRICH: If you look at the press conference held the morning after the election, when we lost five seats and people thought we should gain 15, we still had a majority. It was the first time since the 1920s that any leader had led the Republicans in the House to a majority for three consecutive elections. But we lost five seats.

And that morning, I said, I take full responsibility, and I'm the leader. We should have done better.

(CROSSTALK)

KING: I was around at that time, sir. You did after that campaign for votes.

GINGRICH: Yes. I called around. I called around. I called around and said, look, this is where we are. And friends of mine said, you're not going to have the authority and the prestige that you need.

And, frankly, at that point, J.C. Watts really said to me, you will know in your heart what you ought to do. And I thought about it, and he was right.

I was effective as a leader as long as we had an ability to get real things done. I think this is why some people in the Washington establishment are so afraid of me and are so hyperactive right now trying to stop me, because my record was real change. My record was taking on the establishment. And my record was actually trying to get big things done.

There are a lot of folks in Washington who are very comfortable. And they would rather manage the decay than shake things up. And they know that in fact, if I win, I will shake things up.

KING: I'm going to spend most of my day, Mr. Speaker, in familiar territory for you, up on Capitol Hill. It's the president's State of the Union address. I'm going to spend some time with another former speaker, Nancy Pelosi.

You and Nancy Pelosi didn't get along much, but I want you to listen to this moment which has become a bit of a, shall we say, part of an attack by your rivals in the campaign, a joint appearance with Nancy Pelosi.

GINGRICH: And I'm Newt Gingrich, lifelong Republican, and I used to be speaker.

PELOSI: We don't always see eye to eye, do we, Newt?

GINGRICH: No, but we do agree our country must take action to address climate change.

(END VIDEO CLIP) KING: You have said since, Mr. Speaker, that that was one of the dumbest things or a dumb thing. Please, you correct me if I have your words wrong.

Why was it dumb? Because you have changed your mind on climate change, or because Nancy Pelosi has become so polarizing among Republicans, you thought that might hurt you?

GINGRICH: No. No, it was dumb because the intensity of dislike for Speaker Pelosi guaranteed that no conservative would ever see the ad without getting irritated by it.

The fact is, I wrote a book called "Contract With the Earth." I do believe that there are conservative solutions to the environment. In fact, I proposed replacing the EPA with an environmental solutions agency that is profoundly different from the EPA.

So I was trying to find a way to have a debate or a dialogue, if you will, that said, we can have different approaches. I oppose cap and trade. I testified against it. In fact, I followed Al Gore the same day he testified in favor. I testified against it. My record on cap and trade is clear. And I have consistently opposed it.

I think that that particular ad was a mistake. And when you do as many things as I have done in a fairly long career, you're going to have an occasional mistake. My attitude is to admit it, be honest about it, and move on.

(END VIDEOTAPE)

KING: Still ahead: more of that conversation with Speaker Gingrich.

Also, one-on-one with the top House Democrat, Nancy Pelosi. She's not shy at all about making her 2012 Republican nominee prediction.

(BEGIN VIDEO CLIP)

PELOSI: He's not going to be president of the United States. This is -- that's not going to happen. Let me just make my prediction instead by, it isn't going to happen.

(END VIDEO CLIP)

KING: Plus, a snowmobiler's helmet cam was on when one of his friends was buried alive -- the dramatic footage when we come back.

(COMMERCIAL BREAK)

KING: Welcome back.

(NEWS BREAK)

KING: In a minute, more on our conversation with Nancy Pelosi, including what she thinks of President Obama and -- you won't want to miss this -- what she thinks of the prospect of a President Gingrich.

(COMMERCIAL BREAK)

KING: Welcome back.

In this half-hour: an exclusive interview with the former House Speaker Nancy Pelosi, who's predicting flat out Newt Gingrich, she says, will never be president.

Plus, more from our talk with Gingrich today, including another look at our encounter during last week's presidential debate.

And we will tell you, what's more valuable, the White House or one Apple store?

You see our beautiful backdrop tonight. We're on a balcony at the Russell Senate Office Building just across the street from the United States Capitol. It's a gorgeous evening in Washington. In about two hours President Obama will be in that building. He'll head to the House chamber for his annual State-of-the-Union address. An election year speech playing against the backdrop of an already crackling Republican campaign for the nomination in an effort to replace him. It will be a dramatic and a very, very important night for the country.

Our chief political analyst, Gloria Borger, is with us. You've been working your sources at the White House and the Congress all day long. What's the biggest thing to expect tonight?

GLORIA BORGER, CNN POLITICAL ANALYST: I think we're going to see the president draw a distinction. He's going to kind of double down, I think, on the issue of the wealth gap. And I think what we see played out in the Republican race here is Mitt Romney saying that he paid 14 percent in taxes. You've heard the president say that that's not fair, that Warren Buffett, of course, pointed out that he pays a lower tax rate than his secretary.

So I think this is going to be a president who tries to draw a distinction between what we've been seeing on the campaign trail and what he's going to be talking about when he starts campaigning. Of course, this is a little bit campaigning, don't you think, here tonight?

KING: A little bit campaigning. The video we're showing is the president working with his speech writers and other aides on the speech. That's the Oval Office right there. Always fun to be at the Oval Office.

Look, the president knows it's a policy speech. It's also a political speech. Some Democrats have some qualms. This is a president of his first campaign said we'd repeal the Bush tax cuts, make the rich pay more of a fair share. It seems now that he means it. I don't mean to be disrespectful, but Democrats have said he's caved in negotiations before, he's caved in the past. He's going to draw a pretty sharp line tonight. BORGER: Right. I think he is going to draw a sharp line tonight. Kind of reminds me, and of course, you covered Bill Clinton in 1996. Bill Clinton had to give a very similar speech at a similar point in his presidency, looking towards re-election, having lost control in Congress.

And what did Bill Clinton do? Bill Clinton actually said the era of big government is over. Barack Obama is not going to say that. What Barack Obama is going to say, if you believe everyone you talk to, is he's going to say, we need to find a government that works for us. We need to find a government that cares about the middle class. We need to find a government that can reduce this gap between the rich and the poor.

But he has to do it, I think, in a way that doesn't seem like class warfare. Because if you do it that way, you're going to turn off an awful lot of independent voters.

KING: And he's going to also say you might be mad at what's happening in Washington. Don't just blame the incumbent president or try to blame these guys on Capitol Hill, as well. An interesting speech for the president. Gloria will be with us all night, as well. Gloria, thanks.

BORGER: Sure.

KING: Tonight's State-of-the-Union speech not only will be President Obama's battle cry for his own re-election. It's also a shot against what Democrats like former speaker Nancy Pelosi say is a do-nothing Republican Congress. After a year of leading the Democratic (UNINTELLIGIBLE) in the House, the former speaker has hopes of a Democratic comeback this fall. A bit earlier today we sat down for an exclusive conversation.

(BEGIN VIDEOTAPE)

KING: Thank you for your time on a busy day.

REP. NANCY PELOSI (D-CA), MINORITY LEADER: Thank you.

KING: The president will come up tonight. It's an election year State of the Union. You know this. If you talk to some of your members, they cringe a bit when he rails against a do-nothing Congress. They want him to make sure he says do-nothing Republican Congress. And sometimes he doesn't. How much time have you spent with the White House saying, "Make sure you get that right, Mr. President"?

PELOSI: Well, I'm just fine with the president saying he's running against a do-nothing Congress. Because with the Republicans in the majority, that's exactly what this is.

And while I would prefer that he inject Democratic from time to time, what's important is what this means for the American people. And this Congress does nothing. When they do, it's about stopping initiatives for clean air, clean water, food safety, public safety, public health, public education, Medicare, Medicaid, Social Security, you know it. You name it, they're against it. Because if there's any government role, they're against it.

So I'm perfectly happy for the good of the American people that the president is running against a do-nothing Congress.

KING: And what's the sense within your caucus? You know from time to time, sometimes it's overstated but there is some grumbling sometimes that the Democrat at the other end of Pennsylvania Avenue is most worried about himself, maybe not so worried about you and your members.

PELOSI: We -- we feel very comfortable with the president and very proud of him and look forward to his re-election and helping us to win the House.

KING: The last time I came up to see you, you said that you had reasonable confidence that at the end of this election, the Democrats would win and that you might get the speaker's gavel back. Speaker Boehner says he views that as nearly impossible. He says, actually, he thinks the Republicans will be the majority at least through 2020.

PELOSI: Well, he said that, but on the same day that that was reported, the "National Journal" poll had us 11 points ahead in the generic poll. You don't know.

We do know that we're way ahead of schedule in what we needed to do to recruit the candidates, to raise the resources, to fight the redistricting, to put us in good position. Our chairman, Steve Israel, who's magnificent, says it's razor-thin right now. That's a good place for us to be. And we have the momentum.

KING: And you say momentum. In terms of the thematics, the president speaks to the country. It's a framing moment. It's a long way from now to November, but it's a moment to frame the issues. From a House Democrat standpoint, what is the single most important thing you think the president needs to hammer home tonight?

PELOSI: Jobs. But we, in our own approach to it, which is very consistent with what the president says, we're about reigniting the American dream, to bring -- build ladders of opportunity for people who work hard, play by the rules, take responsibility to reach their success. We want to do that by creating jobs, make it in America, build the American infrastructure, do it from the community-based leadership. And we believe that is consistent with what the president is saying.

But it's all about jobs and economic opportunities. Small businesses, the entrepreneurial spirit of America, a thriving middle class.

KING: What did you learn from 2010, and what do you hope the president learned from 2010 in the language of that? Because, you know, in the last cycle, the stimulus plan was not popular. The Republicans were able to say they're about government, and it hasn't worked. In terms of -- your party believes in government sometimes pulling the levers to help people. What have you learned about the message of that?

PELOSI: We're about public-private partnerships. That's been the history of America. And we have to have both. I believe that the messaging will be much more clear this time, because the president is on the ballot, so his -- President Obama has been a job creator from day one. The recovery package saved or created at least 3 million jobs. That is clear.

In the second year of his term, which is the last measurement we have, he created more jobs in the private sector -- I don't say he did -- more jobs were created in the private sector than in the eight years of the Bush administration. I don't think many people know that.

I think that we shouldn't assume anything. And the message has to be clear and direct and make the distinction. I feel very confident that the president will do that. We will echo it across the country.

KING: You come up from time to time in the Republican presidential campaign. Former Speaker Gingrich's rivals like to tell everybody about the time he sat on the couch with you, and you talked about global warming.

I spoke to the former speaker today, Speaker Gingrich. And I played him that clip. And he said it was the dumbest thing maybe he's ever done politically, because he underestimated how polarizing you are to Republicans.

PELOSI: Just like him to project it onto somebody else. I think he's done plenty dumb things, and there's stiff competition for what is the dumbest thing he's done, of course, including his violations of the ethics rules of the House of Representatives.

But the fact is, it's typical vintage Gingrich to say, "It's about her; it's not about me." We were concerned about climate change and that's the issue. It's not about that he was on the sofa with me. It's that he was on the sofa with the issue that we must do something about the climate crisis. That's what he's walking away from.

KING: You mentioned the ethics committee investigation. He says that was a partisan vendetta led by Democrats. Governor Romney says there's a report somewhere. The findings have been posted online, but there's a thicker report that somehow Speaker Gingrich, as the nominee, is going to come spilling out into the public. What's your memory about that? Is there a thicker report that has things that people don't know that we should know?

PELOSI: Let's not stipulate to something that Speaker Gingrich said. This is not a Democratic vendetta. It was a Republican- controlled Congress under whose auspices these charges were brought and against Speaker Gingrich. It was a very sad time. However, I think the public record speaks for itself. I don't know if there's any reason to go further than that. But read the public record.

KING: He took a bit of a shot at you last night. His history was a bit revisionist. He said he left the Congress after the election losses. And we know that he campaigned for re-election and then quit when he realized Bob Livingston had more votes.

But in his take last night at the debate, he said, "I wasn't going to hang around like Nancy did." Meaning he has the grace...

PELOSI: Put it on somebody else. It's all -- it's vintage projection, projection, projection. He would love to have stayed. He just didn't have the support in his caucus to do.

But you know what? That's neither here nor there. What's important is how -- not what job he has but how many jobs are created for the American people. And that's what this election is about, the future. It's not about Newt Gingrich's past. It's about America's future. Who's going to be better prepared to take us into that future?

We have great confidence in President Obama, a great leader with great vision, knowledge, judgment, strategic thinking, and passionate about our great country and able to communicate that message. That's what this is about. No use wasting any time on the past.

KING: Not on the past but let's look to the future. You make your case there passionately for President Obama. You also understand it's tough re-election climate for any president, Democrat or Republican, in this economy.

Because of your history with Speaker Gingrich, what goes through for mind when you think about the possibility, which is more real today than it was a week or month ago, that he would be the Republican nominee and that you could come back here next January or next February with a President Gingrich?

PELOSI: Let me just say this. That will never happen.

KING: Why?

PELOSI: He's not going to be president of the United States. That's not going to happen. Let me just make my prediction and stand by it. It isn't going to happen.

KING: Why are you so sure?

PELOSI: There's something that I know. The Republicans, if they choose to nominate him, that's their prerogative. I don't think that's going to happen.

KING: Had about a 12-minute conversation with the former House speaker, Newt Gingrich, today as he campaigns for the Republican presidential nomination down in Florida. We talked about last night's Republican debate. We talked about tonight's State-of-the-Union address. And yes, we spent a few minutes about last week.

(BEGIN VIDEOTAPE)

KING: Let me close, sir. We had a bit of a moment the other night in South Carolina. I asked a question at the beginning of the debate. You took offense. Here's part of your answer.

(BEGIN VIDEO CLIP)

GINGRICH: Let me be quite clear. The story is false. Every personal friend I have who knew us in that period says the story was false. We offered several of them to ABC to prove it was false. They weren't interested, because they would like to attack any Republican. They're attacking the governor; they're attacking me. I'm sure they'll probably get around to Senator Santorum and Congressman Paul. I am tired of the elite media protecting Barack Obama by attacking Republicans.

(END VIDEO CLIP)

KING: I want to come back to your point there, sir. You were attacking me, and you were calling me part of the elite media. And we can debate whether it was an appropriate question for the beginning of debate. My business is debating that. But I could not have asked you the question if your ex-wife had not come forward. She's a Republican, sir. She says she supports much of your principles. How was that an example of the elite media trying to protect Barack Obama?

GINGRICH: Well, you have to ask yourself the question. Why would ABC go back many years, why would they dredge up something which had already been reported several years ago? Why would they do it two nights before a primary? Why would they refuse to have other witnesses rebut her?

We offered them a number of people who were there at the time, who said what she was saying just wasn't true.

Now I would just suggest to you that, when the only person you get is an ex-wife who wants to testify on the air just before a primary with nobody allowed to rebut her, there's something a little goofy about that design.

And my point to you, John, was simple, and I repeat it. You didn't have to take the bait. You didn't have to pick it up. You could have ignored ABC. We could have gone straight to energy policy, the economy, balancing the budget. There were lots of big questions we could have talked about instead of taking the time on something like that.

KING: We did talk about other issues, but a lot of people in the state were talking about that issue that day, as you well know, sir. A lot of people think that exchange worked to your benefit. That's not for me and my calculation.

But again, have you spoken to your ex-wife at all? Why did she come forward at that time? ABC can speak for itself. It says -- I can't speak for ABC, but it says if you had offered people, it would have interviewed them.

GINGRICH: Oh, that is just plain baloney. I mean, I'll check with R.C. Hammond in a minute. But if they're saying that, they're not being honest, because they said explicitly the opposite. So I will check with R.C., because he was briefing me on this the whole way through. We had several people prepared to be very clear and very aggressive in their dispute about that. And they weren't interested.

KING: Mr. Speaker, thanks for your time today. We'll see you on the trail in Florida soon.

GINGRICH: Good to be with you, John.

KING: Take care, sir.

(END VIDEOTAPE)

KING: As we count down now to tonight's State-of-the-Union address we're joined here on the Russell balcony with CNN contributors Donna Brazile and David Frum. I want to talk about the speech in a minute. But to go back to this moment with Speaker Gingrich. I was not trying to re-litigate it. I wanted to see his tone.

He wins in South Carolina; he goes to Florida. He's a much more kinder, gentler guy. He's not -- you can see, he's not happy with ABC. But I was expecting him -- I was thinking maybe he'd want to come at me again. He's in a much better place now, because he thinks what? He needs to be calmer; he needs to be less combative?

DAVID FRUM, FORMER BUSH SPEECHWRITER: He's toned it down in a lot of ways. In South Carolina, Gingrich campaigned with what a lot of they call racial cues. I was re-struck in the Florida debate, they're suddenly gone. In Florida, he's suddenly very interested in reaching out to people who are different from his base voters. In South Carolina, he wasn't. Different Newt -- different state, different Newt.

KING: I know you don't like him.

DONNA BRAZILE, DEMOCRATIC STRATEGIST: Why would -- why would you say I don't like him? Actually, I have a lot of respect for him. Because back in the day when I worked on Capitol Hill, Newt Gingrich worked with my former boss, Eleanor Holmes Norton, President Bill Clinton, of course, and others to help us save the District of Columbia. So I have enormous respect for him. I disagree with his policies. KING: And political strategy-wise, as David just noted, a shift from South Carolina to Florida. If you were a Republican advising him, is he doing the right thing?

BRAZILE: Well, absolutely. Look, John, he has momentum. He also understands that he has to win this state in order to continue his momentum to build up more delegates. He's leading in delegates. I think he's on a roll.

The question is, will Mitt Romney change his temperament over the next couple of days in order to beat Newt Gingrich?

FRUM: It's not just about one state, though. He's got a problem, which is Republican Party donors, activists, the party machinery are terrified of the prospect of a Gingrich nomination. He's trying to reassure them right now, "Look, I'm a more stable person than you remember me as being from ten years ago and before."

KING: And that memory's from this building here. Let's talk about tonight. The president of the United States two hours and ten minutes coming up and giving his speech.

Here's one of excerpts the White House released tonight. The president will tell the American people this: "We can either settle for a country where a shrinking number of people do really well while a growing number of Americans barely get by. Or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules."

The president, David, you used to write speeches for George W. Bush. You write a lot. He's coming up here to draw this class line, saying the rules as they're now written, the Republicans, he will insist, are trying to help the rich at the expense of the middle class. The right campaign year State-of-the-Union?

FRUM: Well, it's a second best. Ideally, he'd like to come up to Capitol Hill and say, "When I came here things were in terrible condition. Now they're much, much better." He would like to have a recovery message.

But since he can't have that message -- there's been a bit of a recovery but not much of one -- that he is now trying to globalize his core supporters by making them more inflamed, by raising ideological issues. That's his second-best strategy. Not as great as the "I made things better" strategy.

KING: I asked the now leader, former Speaker Pelosi about this. Some of the Democrats, they'd love for him to rail against the Republican Congress now, but they cringe a bit when he says do-nothing Congress, and doesn't include the "Republican" part in there.

You're close to a lot of Democrats on Capitol Hill. Do they trust the president to frame it right or are they worried that he's worried more about him and less about them?

BRAZILE: Well, most of Americans know that Congress is as popular as a root canal right now. But the president's job tonight is to remind the American people that this Congress also has a responsibility to act on behalf of the American people.

You know, it's not about class warfare. It's about fairness and shared sacrifice at a time the economy is struggling to move forward. And I think the president tonight is going to remind the American people that he's on their side, and he's not going to stop working and fighting until he helps all Americans.

KING: How nervous are Democrats and what do you make with your experience on this number? The Gallup poll with the approval of the president, and this is a big night, according to the election campaign. He will speak to the Congress tonight with a 44 percent approval rating in the latest Gallup poll. That's down from 46 percent. So that's margin of error. He's about the same.

So he comes to the American people underwater, if you will, Donna, as a Democrat: under 50 percent. If you're running for re- election, Democrat, Republican, independent, that's a tough number.

BRAZILE: Well, you know, as you can tell from the Republican race, Newt Gingrich has had more rebounds than Larry Bird. So all I would tell the president is hold on, because basketball season is under way, and guess what? His numbers will also rebound.

FRUM: The thing that he has to be watching is the most important events are happening well beyond this city. They're happening in Europe. If the euro currency continues to be in trouble, if it looks like the German economy is going into recession, then that 44 number has a long way down to go, because this country cannot take more bad news, whether or not the bad news is generated here or across the ocean.

KING: Well, it is out of his control.

FRUM: I think this is the election that is most out of the control of the incumbent where big decisions will be made in other countries.

BRAZILE: John, I think it's important to tell the American people, "It's not about my poll numbers; it's not about my reelection. It's about the American people. It's about the heart and soul of this country." And the president has to once again show the American people that he's on their side and he's going to fight for them.

FRUM: I think that the president has a lot of goodwill from the American people. That's -- you see it in a lot of numbers, but in the end, they want results. And whether he didn't get the results because he made bad mistakes or whether he was just unlucky, at some point people will say, "OK, send us a luckier president."

BRAZILE: Well, and maybe they want a president who will not take us back to the policies that dug us in this deep hole. The president has been able to get us a little bit out of the ditch, but we still have work to do. And the president will tell the American people tonight that we have work to do, and he's ready -- he's ready to do it.

KING: Good debate about what to comes. Certainly appreciate your insights, Donna Brazile, and David Frum. . Beautiful night out here. Isn't it beautiful?

BRAZILE: Very nice.

FRUM: You can forget what's going on inside.

KING: "ERIN BURNETT OUTFRONT" coming up at the top of the hour. Erin's with us now live.

And Erin, you've been digging into Mitt Romney's tax returns. What have you uncovered?

ERIN BURNETT, CNN ANCHOR: I mean, you know, this is kind of insane, John. It's really ridiculous, right? All right. Look. The guy made a lot of money. We know that, OK. But we had 500 pages here.

We actually put together a strike team of seven IRS experts, tax experts to go through it to find out some things that stood out. And we did, although it does appear that Mitt Romney paid everything that he was supposed to pay.

There are a couple of really interesting things in here, and his use of blind trusts. He's talked about that before, perhaps not in a way that he wants brought up tonight, but we got to the bottom of it. So we're going to be breaking that down.

And also we're going to be getting ready for the State of the Union. Of course, as you know, and I'm glad the weather is good there, John, because otherwise, you'd be really -- it wouldn't be so pleasant.

KING: I actually like the cold. I wish it were snowing, but you know, if it's a nice night, I'll enjoy the nice night. I'm a winter guy. I'm more than happy with the snow.

Now, you promise me you're going to recycle that paper or at least use it for a fire starter or something once you're done.

BURNETT: For a fire starter, I'll do that. I will do that. Although I've got to say, it's funny. You look here at the top of the 1040, Willard M. Romney. Forget, you know, it's Willard.

KING: Yes, it's...

BURNETT: By the way, did you know that "Town and Country" had him in 1967 as one of the most eligible bachelors in America? I just saw this. And that he's the kind of guy who might end up spending weekends at the White House.

KING: There you go. He'd like to spend the whole week. Weekends at Camp David is really his goal.

BURNETT: I'm sure he would.

KING: Well, all right, Erin. We'll see you in a few minutes.

Still ahead here, why is the real-estate value of Apple retail stores worth almost as much as the White House? We'll explain next.

(COMMERCIAL BREAK)

KING: Kate Bolduan is back with more of the latest news you need to know right now. Hello, again.

BOLDUAN: Hello, again. Lots of news to catch you up on.

And of course, what else do you want to know? Big news out of Hollywood. The Oscar nominations are out. Martin Scorsese's "Hugo" has the most nominations, a total of 11, including best picture and best director. In the last 20 years, the film with the most nominations has won best picture 15 times. It's main competition may be the silent film "The Artist," which has the second highest number of nominations, 10. The Oscars will be handed out February 26.

Here is a good bit of trivia. CNN Money tells us someone figured out that Apple computer stores around the world sell $4,709 worth of merchandise per square foot, which makes every single Apple store worth almost as much as the White House, which is valued at $4,752 a square foot, just $43 a square foot more. That is pretty interesting.

KING: More fun toys at the Apple store and more prestige at the White House. Right?

BOLDUAN: Exactly. The balance.

KING: All right. Finally, tonight's "Moment You May Have Missed." Happened right here on Capitol Hill. It's a sweet moment, you might say. Here's the Senate majority leader, Harry Reid.

(BEGIN VIDEO CLIP)

SEN. HARRY REID (D-NV), MAJORITY LEADER: Here's -- here's the deal. My caucus likes me a lot, so they gave me a great big box of cupcakes. I said, what could I do with these? My wife and I aren't going to eat them all. My staff is far too fat anyway, so -- and some of you looks like you could use a cupcake, so the cupcakes are yours.

(END VIDEO CLIP)

KING: So, a few moments later the Republican leader, Mitch McConnell.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R-KY), MINORITY LEADER: I understand you've been bribed, have you? I have no gifts to offer you, so I expect the worst possible treatment in return.

(END VIDEO CLIP) KING: Kate never brings me cupcakes.

We've got to go. Stay with CNN for the president's complete State of the Union address. And "ERIN BURNETT OUTFRONT" starts right now.